How to replicate this effect (Parts of material more reflective than others)
The following is a way to handle displacement in a way that offers a lot of control and works very well for baking various types of maps including normals, height and ambient occlusion. 

To start with, add a multi-res modifier to your model as shown in the following image.  

Now make sure you are back in Object mode and increase the number of subdivisions for the modifier.



Now that the mesh is ready for geometry displacement you can add a Displace modifier as shown here.  

Now once you've added displacement it could look something like the following 

(For people that don't know this already, if you right-click on an image here on StackExchange, then choose 'View Image' you will be able to see the larger version so detail is more clear.)



For the nodes, I've used the same basic setup as username:GiantCowFilms with a brightness/contrast node added in to adjust the mix between Shiny and Diffuse.

The same image is being used for the Material and the Displace Modifier.